CHANGES IN

PERSONNEL STATUS
Chapter 7
Changes in employment status are bound to
take place during the period of employment.
There is a continuous movement of
employees in the form of promotion, transfer,
demotion, or separation.
Promotion

■ It involves the reassignment of an employee to a higher

job position.
■ This is also refers to the upward or vertical movement of
employees in an organization from lower level jobs to
higher level jobs involving increases in duties and
responsibilities, higher pay, and privileges.
■ It serves as encouragement and inspiration to other
employees to exert their maximum effort.
■ This can also help instill loyalty to the firm.
Approaches to Recruit Employees for
Promotion
a. Closed promotion system – the responsibility of the
supervisor to identify promotable employees for the job to
be filled.
b. Open promotion system – also known as job posting –
enhance participation and the achievement of equal
opportunity goals.
Criteria Used in Promoting Employees
1. Seniority – length of service
a. Straight Seniority – the length of service of an
employee is the sole basis for determining
who gets the promotion.
b. Qualified Seniority – the more competent employee
as compared to another employee with longer
service will be promoted.
2. Current and past performance – promotion is based on
previous job performance and evaluation.
Unofficial Promotion Criteria
1. Personal Characteristic
2. Nepotism – showing of favoritism or patronage to
relatives
3. Social Factors/friendship
Demotion

■ This is the reassignment of an employee to a lower job

involving fewer skills and responsibilities.
■ It may not involve a reduction in pay but a reduction in
status or privileges.
Reasons behind Demotion
■ Reorganization, company merger, or business reverses
resulting to fewer jobs, forcing some employees to accept
demotion.
■ Inability of employees to perform their job based on
acceptable standards.
■ As a form of disciplinary action or a way to handle
disciplinary problems, also viewed as a routine form of
punishment for wrong doing.
■ The tool used to inform the employee concerned that he
or she is beginning to be a “liability” rather than an
“asset” to the organization
Transfer
■ This is the reassignment of an employee to a job with
similar pay, status, duties and responsibilities or from
one unit to another in the same company just like being
an invoice clerk to a sales clerk.
Reasons for Transfer
■ Due to job dissatisfaction
■ In conflict with supervisor or coworkers
■ For employee convenience
■ Organizational needs may require transfer due to
business expansion, erroneous placement, or to meet
departmental requirements during peak season.
■ For an employee to be better suited or adjusted to the
job.
Employee Separation

■ Different kinds of separation occur depending on

whether the employee or the employer decides to
terminate the employment relationship
■ Three types of separation from the service :
1. Termination by the employee
2. Voluntary resignation by the employee
3. Retirement of an employess
Termination by the employer
■ You can only terminate an employee in the Philippines if
you have a just cause or an authorized reason.
■ A just cause can be an employee’s unethical behavior
or negligence. Legal grounds, on the other hand, are the
basis for authorized termination.
■ To end an employment contract, you need to document
the employee’s behavior and bring out the specific
instances that led to termination.
According to Article 282 of the Philippines Labor
Code, the following just causes by the employee
can be the basis for firing an employee in the
Philippines:
■ serious misconduct or willful disobedience
■ gross and habitual neglect of duty
■ fraud or deliberate breach of trust
■ commission of a crime or offense
■ other similar reasons
Article 283 states that you can also terminate
an employee for authorized causes, including
business reasons such as:

■ installation of labor-saving devices

■ redundancy
■ reduction of costs to prevent losses
■ the closing or cessation of operation
Also, if your employee suffers from a health
condition that lasts more than six months
or the law prohibits them from working with
such disease or working is harmful to
themselves or their co-workers, you are
entitled to terminate their contract (Article
284, Labor Code).
Voluntary resignation by the employee

■ The second type of employee termination is when

the employee decides to resign.
■ According to Article 285 of the Labor Code,
employees in the Philippines can quit their jobs
either with or without a just cause.
Without a cause

■ The employee needs to hand in a letter of

resignation with a one-month notice. If they do not
submit a notification, you can charge them for any
concurrent damages. For example, for the amount of
work they fail to deliver due to their untimely
resignation.
With a cause
An employee may put end to the relationship without serving
any notice on the employer for any of the following causes:
Serious insult by the employer or his representative on
the honor and person of the employee.
inhuman and unbearable treatment by the employer
crime committed against the person of the employee
or any immediate members of the employee’s family
other similar causes
 Basis of Termination Pay
■ You don’t have to pay separation compensation if your
employee leaves voluntarily. The benefit only applies if the
employee loses their job due to reasons that are not their
fault. For example, if you close down the business or
aggregate their position.
■ However, there are certain conditions where the employee is
entitled to a separation pay:
1. when the employment contract or Collective Bargaining
Agreement (CBA) provides a separation payment
2. when the company’s practice or policy authorize it
Retirement (Article 287 of Labor Code)

■ An employee may be retired upon reaching the age

of 60 years or more, but not beyond 65 years or
more or other applicable employment contract.